From Lasik surgery to prescription-filling, consumers are responding to the U.S. economic downturn — which may result in either rational or irrational health behavior, depending on your lens on “health.”
Retailers of health products are responding to the economic environment, in part, by co-branding with health suppliers and plans to gain traction with consumers. A new program has been forged between Aetna and Costco to offer a co-branded Medicare drug plan. Aetna Medicare Rx will be offered in Costco stores located in 17 states (Alaska, Arizona, California, Colorado, Florida, Hawaii, Idaho, Illinois, Michigan, Nevada, New Mexico, New York, Ohio, Oregon, Utah, Virginia and Washington). With no deductible, plan premiums will range from $50-$70 a month. Copays will be $5 for generics and even free for some generics.
Never to be outdone in the health retail space, Walmart has a pilot program with Caterpillar making Tier 1 generic drugs free to employees and families through 2009. Walmart claims that its $4 generic drug program, which begun in the fall of 2006, has saved customers over $1 billion (take that, you PBMs)
According to BIGresearch, Walmart’s brand equity and sales have gained among households with incomes over $50,000 this year. According to BIGresearch, Walmart sales increased 2.5% in this income group.
In the grocery space, Weis Markets has rolled out a new Rx drug plan offering 90-days of more than 350 generics for $9.99 (that’s $3.33, beating Walmart by $.67 a month for those watching pennies–why not?). This plan is now available throughout Weis Markets 155 stores in Pennsylvania, Maryland, New Jersey, New York and West Virginia.
For grocery shoppers in the south, Winn-Dixie is now licensing content from MayoClinic.com, including Clinic recipes (tying to the grocery chain’s core business, of course), health tips (this week, on diabetes prevention and nutrition suggestions), and diet. Winn-Dixie currently operates 521 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. This is a smart public health strategy for Winn-Dixie: in 2007, obesity rates for four in five of these states were over 25%, at the top of the U.S. roster: Mississippi ranks #1 (32%), and Alabama, Louisiana, and Georgia are in the top 10. (Florida does much better and ranks in the bottom 10).
There’s another category of health purchase that’s been significantly impacted by the economic downturn in the U.S.: cosmetic and elective surgery. A spotlight on Lasik surgery tells the story. According to RBC Capital Markets, surgery volume in one of America’s largest Lasik providers has plummeted. LCA-Vision Inc. operates 77 LasikPlus centers in 33 states. The number of Lasik procedures in the chain has fallen by 50% since last year. Other Lasik centers have been affected, including the one endorsed by Tiger Woods, TLC Vision Corp.
According to industry analysts, cosmetic procedures such as botox injections and breast implants have also been postponed. Today’s New York Times has an article titled, “In Hard Times, a Cosmetic Hard Sell.”
Health Populi’s Hot Points: According to Kevin Ellich, health care analyst at RBC, “People are delaying or forgoing needed medical procedures, not just elective stuff.” In the former scenario, the citizen’s health can be compromised: in addition to not filling necessary prescriptions (esp. where no generic may exist), there is evidence that people are forgoing doctor’s appointments to save co-pays or, if uninsured, visit fees.
That’s when a rational economic decision may be an irrational one for optimal health outcomes. Still, many people seem to be finding enough cash for a few treats, according to consumer research from Acxiom and from HSBC.